Stefan Mileschin

Nokia Corp., the world’s No. 1 maker of handsets that is losing market share these days, on Thursday said it would shut down a manufacturing facility in Romania and re-consider the fate of its factories in Finland, Hungary and Mexico. While the firm believes the shift of manufacturing to Asia will help it to cut costs, it is clear will no longer be able to build the same volume of handsets as it used to in the future.

Nokia said it would adjust its manufacturing capacity and renew its manufacturing operations to “better serve its global network of customers, partners and suppliers”. In particular, the company wants to focus its feature phone manufacturing on those locations with optimal proximity to suppliers and key markets. As a result, Nokia plans to close its manufacturing facility in Cluj, Romania by the end of 2011, as Nokia's high-volume Asian factories provide greater scale and proximity benefits, according to the company.

Moreover, Nokia will “review” the long-term role of its manufacturing operations in Salo, Finland; Komarom, Hungary; and Reynosa, Mexico. These factories are expected to continue to play a key role in serving European and North American smartphone customers, but the plan is to gradually shift their focus to “customer and market-specific software and sales package customization”, which essentially means that the factories will cease to build mobile phones as they do now.

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